Last year, regulators announced the Client Relationship Model - Version 2 (CRM2), which included a key requirement that financial advisors explicitly disclose all investment fees charged to clients. The regulation, which went into force in July 2016, is required to be implemented by all financial advisors by January 2017.
2016 was a year shaped by surprises and drastic changes in sentiment. How investors feel about the economy is what’s reflected in prices. While major equity markets had a generally positive 2016 – driven by strong US economic data and improving conditions in Europe – there was a lot of global negativity for equities going into the year, fueled by China’s slowing economy, dropping oil prices, and geo-political uncertainty. Investors had more cash parked on the sidelines than ever before. However, major equity markets had a positive 2016 climbing the walls of worry, mainly driven by strong economic data out of the US (jobs, in particular) and improving economic conditions in Europe.
How well do you think you’re investing the savings from your employer-provided group RRSP savings program?
With the US election results now behind us, many economic forecasters have been using their crystal balls to figure out what Trumponomics would mean to the US and the global economy. Prior to the election markets had a negative view of the proposed Trump economic policies, but views seem to have since changed. Most equity markets reached all-time highs and bond yields increased on the expectation that the proposed tax cuts and infrastructure spending would increase government debt, inflation and borrowing costs, while in the long term, these policies and deregulation would increase economic growth.
The morning after the election, investors were understandably uncertain. We sent the following note to our clients to address any concerns:
After the polls called for a 70-90% likelihood of a Clinton victory, the world is surprised, to say the least. Investors don't like surprises, and the uncertainty that a Trump presidency brings is a recipe for amplified volatility. The market's reaction yesterday morning reeled back from the immediate knee-jerk reaction, but it paves the way for further volatility in the coming months. There are a few key changes we think will influence global markets.
US federal elections are a week away and that means everyone’s favourite reality TV show is coming to an end. While the spotlight will shift away from American politics, we think US policy will still hold the attention of global markets. This month, we’ll take a look at the Canadian economic outlook, US election and interest rate decisions, and major global political threats.
This month, we take a look at how markets performed in Q3, and where they stand going into the final quarter of 2016.
Last month, the U.S. stock market extended a two-month rally into August and hit an all-time high. Optimism surrounding corporate earnings has converted more investors back into the "risk-on" camp, guiding assets into emerging markets and back into a post-Brexit Europe.
There is a purging in Turkey, turmoil in Europe, and a heated election in the U.S., yet the market has had its best month all year. With so much political uncertainty it's hard to see through the noise to find out which stories will be most important to the global economy in the coming months. Often, it's hard to see the forest for the trees, and what makes the headlines isn't necessarily what will drive the global economy.
On July 15, 2016, the CRM2 regulation or the Client Relationship Model – Version 2, which outlines the regulations to improve the disclosure of investment performance, charges, and compensation to clients, became effective in full after a 3 year phase-in period. Specifically, one of the CRM2 requirements that is now effective requires investment advisors to disclose all fees charged to clients directly or indirectly, including sales charges, trailing commissions, trading fees, and other charges.